Part of a generation of young people in Malaysia will suffer (financial) death by DIBS if the new property launch party continues unabated a couple more years. The late stayers, the late comers and the serial party goers. A speculative generation leveraged to the hilt, never ever having faced extreme adversity, not appreciating debt (and its provider, the bank) is a four letter word that will bite you in the behind when you are down.

The developer, having sold, built and completed his highrise project within 3/4 years, washes his hands and moves on with his fat profits to the next project. He knows he's home free. The face off is between the property buyer/borrower and the bank until the 30/35 year loan is repaid. In a meltdown, banks will look after themselves first. Who's going to look after you?

In my experience, the so called deep pocket investor is rarely seen, seldom heard from when the economy is fine. When a recession or property slump hits, a lot of hidden issues suddenly become evident. Example:
Mr Deep Pocket has borrowed heavily from many financial institutions
His other leveraged property investments also suffer sharp price falls
He cannot liquidate his investments quickly enough in a slumping market to avoid sharp losses
His rental income falls off a cliff as tenants cannot pay rents or disappear altogether

Mr Deep Pocket suddenly becomes Mr Sleepless Nights in a recessive economy. Business creditors are after him for long outstanding bills. His business is starved of cash flow and employees are leaving. Banks threaten to foreclose his delinquent loans. Credit is tight and interest rates are exorbitant.

Of course, the above is purely imaginary. However, just ask an experienced businessman how he fared in those recessionary years 1986/7 and 1997/8. Things have been relatively good the last dozen or so years. However, when it next rains, it really is going to pour. The signs for the property market to correct sharply are all there.

That is an extreme, if understandable, reaction. It's probably because these younger ones ( age 30's ?) did not profit at all, or not much, from earlier property ownership before being caught in the 2007/8 financial meltdown, did'nt have enough buffer. Buying at market highs, their hard earned capital was probably wiped out. Their experience was therefore all bad. For this, blame the greedy lenders and investment bankers who helped create the property euphoria leading to the subprime crisis. It does'nt need to be that way.

In Malaysia, there is also a new generation of young property owners shaping up to be the local subprime aspirants. The triple 'B' promoters who believe property prices always rise long term, banks are forever friendly, interest rates perpetually low, economy always buoyant, civil unrest impossible. Let me just say that property values are largely a function of economic growth and social stability. If these two ingredients are missing, bang goes property prices among other things. Then triple 'B' can quickly be turned into single 'B' by banks. A new class of young bankrupts. Is it worth the risk at this late stage of the property cycle?

Some readers have a self interested agenda, others are just flippant or too clever by half, while most will not believe what you write anyway. Notwithstanding you honestly shared your past experience and painstaking conclusions with no ulterior motives. That's human nature. If only one or two readers take note and save themselves from much future grief buying an overpriced property at the wrong time, one has done one's best.

Have a good day.

Good observation. Malaysia's suck it up culture is deployed in so many aspects of our life. Perusing BNM's latest report and their 'hands up in the air' attitude to house prices escalation, you get the feeling that ruling politicians have been calling the shots in continued easy monetary policies to stimulate the economy since 2008. That economic report is an unapologetic excuse for a job poorly done in 2012. BNM has forsaken its regulatory role in deference to political convenience for the past few years. They are so far behind the house price curve whatever remedies they try now or in the future will have very severe ramifications. Bureaucrats are best at doing nothing that endangers their jobs. We consumers, on the other hand, hope for the best but can brace for a speeding train crash.

I'm not sure what you are trying to get at but assuming a Debt of RM300k for Mr Z got you into trouble straight away. From that assumption, and working backwards, you derived income of RM17,857 pm. According to the Stats Dept, the mean Household Income in Malaysia in 2009 was only RM4,025 pm. A far cry from 17k.

The guy is right. He did'nt claim to be an expert in O&G. Goes to show, you don't need too much intellectual power to be financially successful.

On the average, better chances of not losing it all if intellectually powerful. The old adage about a fool, his money and their parting of ways is not an idle observation.

Debt is like a weapon. You have to learn how and when to use it, and how much to take on, to make the best use of debt. In property investment, the judicious use of debt is almost indispensable.

These birds will soon find out the party is being held at a cuckoo's nest and there's no escape. You can't worry for those who do not heed the laws of economic gravity, or who think such laws do not apply to them, or who think themselves smart enough to beat the odds.